Tesla billionaire Elon Musk set Silicon Valley on fire earlier this year when, after teasing the possibility that he would attempt to acquire Twitter, he actually went through with pursuing a deal to take it private.
The deal, worth some $44 billion, seemed to have a green light until Musk recently demanded that the social media platform release true figures regarding how many of the users of the platform are actually bots. The bot issue has proven to be a major hurdle on the financing front, and according to Reuters, could spell the end of the deal altogether.
Musk had arranged to raise private financing to limit the amount of personal capital he would have to inject on top of the $33 billion he pledged from his own fortune.
Obtaining the outside financing now looks to be significantly more challenging, as some analysts have released third-party data that suggests Twitter is made up of far greater than just 5% bots as it claims in its official filings. Some, according to Business Insider, believe that number could be anywhere from 10% — 20%.
The number of bots on the platform is crucial to any business deal, as Musk or anyone else interested in buying such a platform would base their offer off of how many authentic, monetizable users engage on the platform.
As the Washington Examiner reported, Musk’s team filed a complaint with the Securities and Exchange Commission (SEC) over the platform’s unwillingness to share requested data.
“Musk believes the company is actively resisting and thwarting his information rights (and the company’s corresponding obligations) under the merger agreement,” the filing said.
His attorneys added: “This is a clear material breach of Twitter’s obligations under the merger agreement, and Mr. Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement.”
Twitter’s board apparently felt the pressure, as it was announced later that the company is willing to turn over internal data regarding various bot and spam metrics Musk had asked for earlier and was told wasn’t available.
Twitter has reportedly agreed to provide Tesla CEO Elon Musk with access to its internal data after the billionaire threatened to pull out of a deal to acquire the company due to a lack of transparency around bots on the platform. https://t.co/QscKY8cqJJ
— Breitbart News (@BreitbartNews) June 9, 2022
“The social media giant has agreed to hand over a “firehose” of data comprising more than 500 million tweets posted each day, according to The Washington Post, citing an anonymous source familiar with the company’s thinking,” Fox Business noted.
The data, should Musk receive it, will be analyzed by his own experts, as he previously stated that he’s ready for his team to run the numbers to determine the accuracy of Twitter’s claims with regard to how many bots make up the total user count, which will likely make or break the entire deal.